Problem 15-3 (Algo) Lease amortization schedule [LO15-2]On January 1, 2024, Majestic Mantles leased a lathe from Equipment Leasing under a finance lease. Lease payments are madeannually. Title does not transfer to the lessee and there is no purchase option or guarantee of a residual value by Majestic Portions ofthe Equipment Leasing's lease amortization schedule appear below:January 12024202520262027202820292030204120422043Payments$ 26,500$ 26,500$ 26,500$ 26,500$ 26,500$ 26,500$ 26,500$ 26,500$ 26,500$ 26,500EffectiveInterest$ 22,167$ 21,734$ 21,257$ 20,733$ 20,156$ 19,5221. Lease liability2. Right-of-use asset3. Lease term4. Effective annual interest rate5. Total of lease payments6. Total effective interest expenseDecrease inBalance$ 26,500$ 4,333$ 4,766$ 5,243$ 5,767$ 6,344$ 6,978$ 6,590$ 19,910$ 4,599$ 21,901$ 2,409 $ 24,091OutstandingBalance$ 248,178$ 221,679$ 217,337$ 212,571$ 207,328$ 201,561$ 195,217$ 188,238Required:1. What is Majestic's lease liability at the beginning of the lease (after the first payment)?2. What amount would Majestic record as a right-of-use asset?3. What is the lease term in years?4. What is the effective annual interest rate?$ 45,990$ 24,08950Note: Round your percentage answer to 1 decimal place.5. What is the total amount of lease payments?6. What is the total effective interest expense recorded over the term of the lease?years%

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January 1 2024 2025 2026 2027 2028 2029 2030 2041 2042 2043 Payments $ 26,500 $ 26,500 $ 26,500 $ 26,500 $ 26,500 $ 26,500 $ 26,500 $ 26,500 $ 26,500 $ 26,500 Effective Interest $ 22,167 $ 21,734 $ 21,257 $ 20,733 $ 20,156 $ 19,522 $ 6,590 $ 4,599 $ 2,409 tion schedule appear below Decrease in Balance $ 26,500 $ 4,333 $ 4,766 $5,243 $ 5,767 $ 6,344 $ 6,978 $ 19,910 $ 21,901 $ 24,091 Outstanding Balance $ 248,170 $ 221,670 $ 217,337 $ 212,571 $ 207,328 $ 201,561 $ 195,217 $ 188,238 $ 45,990 $ 24,089 se Required: 1. What is Majestic's lease liability at the beginning of the lease (after the first payment)? 2. What amount would Majestic record as a right-of-use asset? 3. What is the lease term in years? 4. What is the effective annual interest rate? Note: Round your percentage answer to 1 decimal place. 5. What is the total amount of lease payments? 6. What is the total effective interest expense recorded over the term of the lease? of a residua

January 1 2024 2025 2026 2027 2028 2029 2030 2041 2042 2043 Payments $ 26,500 $ 26,500 $ 26,500 $ 26,500 $ 26,500 $ 26,500 $ 26,500 $ 26,500 $ 26,500 $ 26,500 Effective Interest $ 22,167 $ 21,734 $ 21,257 $ 20,733 $ 20,156 $ 19,522 $ 6,590 $ 4,599 $ 2,409 tion schedule appear below Decrease in Balance $ 26,500 $ 4,333 $ 4,766 $5,243 $ 5,767 $ 6,344 $ 6,978 $ 19,910 $ 21,901 $ 24,091 Outstanding Balance $ 248,170 $ 221,670 $ 217,337 $ 212,571 $ 207,328 $ 201,561 $ 195,217 $ 188,238 $ 45,990 $ 24,089 se Required: 1. What is Majestic's lease liability at the beginning of the lease (after the first payment)? 2. What amount would Majestic record as a right-of-use asset? 3. What is the lease term in years? 4. What is the effective annual interest rate? Note: Round your percentage answer to 1 decimal place. 5. What is the total amount of lease payments? 6. What is the total effective interest expense recorded over the term of the lease? of a residua

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question 11 Cookie Ltd. receives a four-year, $100,000, zero-interest-bearing note. The present value of this note is $82,270. Interest income to be recognized for calendar 2021 will be O $8,227.00. O $10,000. O $7,910.75. O$4,319.18.
Question 4 On January 1, 2019, Madira Company loaned $216,374 to Virginia Company. A zero-interest- bearing note (face amount, $288,000) was exchanged solely for cash; no other rights or privileges were exchanged. The note is to be repaid on December 31, 2021. The prevailing rate of interest for a loan of this type is 10% . The present value of $288,000 at 10% for three years is $216,374. What is the book value (carrying amount) of the note on Virginia's balance sheet on December 31st, 2019 (round to the nearest dollar)? Question 5 The cost of issuing common stock should be reported in Accumulated Other Comprehensive Income in the balance sheet deducted from the Paid-in Capital in Excess of Par account charged to the income statement as an expense in the year the stock is issued None of these statements is correct Question 6
QUESTION 5 Katharine Bartle will receive an annuity of $4,090.00 every month for 23 years. How much is this cash flow worth to them today if the payments begin today? Assume a discount rate of 5.00%. Oa. $55,398.13 b. $2,119,880.47 c. $672,837.73 Od. $170,156.69
Problem 5-9 (Algo) Noninterest-bearing note; annuity and lump-sum payment [LO5-3, 5-8] On January 1, 2024, The Barrel Company purchased merchandise from a supplier. Payment was a noninterest-bearing note requiring five annual payments of $35,000 on each December 31 beginning on December 31, 2024, and a lump-sum payment of $250,000 on December 31, 2028. A 12% interest rate properly reflects the time value of money in this situation. Required: Calculate the amount at which Barrel should record the note payable and corresponding merchandise purchased on January 1, 2024. Note: Round your final answers to nearest whole dollar amount. Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Time values are based on: n = Cash Flow i= Amount Present Value Payments Lump Sum Amount recorded
Use the table below to answer the following questions: Period 4 567 8 9 10 11 Present Value of an Annuity of 1 4% Future Value of an Annuity of 1 5% 5% 8% 10% 4% 8% 10% 3.6299 3.5460 3.3121 3.1699 4.2465 4.3101 4.5061 4.6410 4.4518 4.3295 3.9927 3.7908 5.4163 5.5256 5.8666 6.1051 5.2421 5.0757 4.6229 4.3553 6.6330 6.8019 7.3359 7.7156 6.0021 5.7864 5.2064 4.8684 7.8983 8.1420 8.9228 9.4872 5.7466 5.3349 9.2142 9.5491 10.6366 11.4359 7.4353 7.1078 6.2469 5.7590 10.5828 11.0266 12.4876 13.5795 8.1109 7.7217 6.7101 6.1446 12.0061 12.5779 14.4866 15.9374 8.7605 8.3064 7.1390 6.4951 13.4864 14.2068 16.6455 18.5312 6.7327 6.4632 Bobby receives alimony payments every 6 months and the next payment is tomorrow. Median homes go for $950,000 and he wants to save $190,000 in 4 years. How much money should Bobby put away into an investment each time he receives alimony payments if he can get a 8% return a year? $35,593 O $31,624 O $23,131 O $46,262
Question 7 of 10 > Every year you deposit $3,400 into an account that earns 2% interest per year. What will be the balance of your account immediately after the 20th deposit? Click the icon to view the interest and annuity table for discrete compounding when i = 2% per year. Choose the correct answer below O A. $79,464 O B. $68,000 OC. $82,611 OD. $51,438 O E $84,263
Chapter 10 Discussion Q2 A perpetuity will pay $900 per year, starting five years after the perpetuity is purchased. What is the present value (PV) at time 0, given that the interest rate is 11%? Show your steps. A) $2695 B) $4312 C) $5390 D) $3234
Exercise 10-3A (Algo) Determining the present value of a lump-sum future cash receipt LO 10-1 Gail Trevino expects to receive a $630,000 cash benefit when she retires seven years from today. Ms. Trevino’s employer has offered an early retirement incentive by agreeing to pay her $368,000 today if she agrees to retire immediately. Ms. Trevino desires to earn a rate of return of 10 percent. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) Required a. Calculate the present value of the $630,000 future cash benefit. Assuming that the retirement benefit is the only consideration in making the retirement decision, should Ms. Trevino accept her employer’s offer? (Round your final answer to the nearest whole dollar value.)
Calculate the principal portion of the second payment on the required on an amortized loan annual interest rate of 8.25% for 20 years. finance the purchase of a new home priced at $99,757.57 assuming the O A. $165.30 O B. $174.17 OC. $175.30 O D. $164.17 Click to select your answer. tUs /- MacBook Air 888 F4 14 F7 F1 F3 FS F6 II 4) F9 F10 F11 @ 2$ 4 23 & 2 6. 0. R Y P. S D F H. J K B alt command +
Net Present Value Method for a Service Company Opulence Corporation has recently placed into service some of the largest cruise ships in the world. One of these ships, the Bellwether, can hold up to 3,200 passengers and it can cost $640 million to build. Assume the following additional information: There will be 300 cruise days per year operated at a full capacity of 3,200 passengers. • The variable expenses per passenger are estimated to be $95 per cruise day. The revenue per passenger is expected to be $475 per cruise day. The fixed expenses for running the ship, other than depreciation, are estimated to be $94,848,000 per year. • The ship has a service life of 10 years, with a residual value of $100,000,000 at the end of 10 years. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7…
A B D F 1 Loan (PV) $ 300,000.00 2 APR 4.50% 3 Monthly Rate 4 NPER 5 Monthly Payment 0.38% 360 $1,520.06 6 7 Payment Number Beg Balance Interest Principal 8 1 ? ? 10 3 ? 11 4 12 ? 13 6 14 7 ? 15 8. ? 16 9 ? 17 10 18 11 19 12 ? 20 21 Cumulative Totals after Year 1 22 Interest 23 Principal Paid 24 25 What if the goal is $1,400 monthly payment? 26 Monthly Payment 27 Monthly Rate Needed ? 1,400.00 28 APR Needed .....c.